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Flood Insurance

The National Flood Insurance Program (NFIP)

Before discussing flood insurance and the specifics; it’s important to understand a couple fundamental differences. The National Flood Insurance Program (NFIP) is just that, a program. It is a federally regulated program. Home insurance is generally a policy underwritten by insurance companies. Generally speaking a home insurance policy contains much broader language and coverage than the NFIP. The NFIP is very specific in their definitions of coverage and subsequently the claims that are paid based on that language. Look for our next blog where we discuss the big misconception on “basements”.

Basements – There is no coverage or is there?

First, look at the definition of flood as outlined by the NFIP

The NFIP defines a basement as any area of a building with a floor that is below ground level on all sides.-NFIP Website

Many of us who live in NJ have a basement as defined by the NFIP. While there is no coverage to basement improvements (such as finished walls, floors and ceilings), or personal belongings kept in a basement (such as furniture and other contents). Most people who had a Sandy claim came to this realization. However, the following is a list of covered items in a basement that are covered:

The following items are covered under building coverage, as long as they are connected to a
power source, if required, and installed in their functioning location:
• Sump pumps
• Well water tanks and pumps, cisterns, and the water in them
• Oil tanks and the oil in them, natural gas tanks and the gas in them
• Pumps and/or tanks used in conjunction with solar energy
• Furnaces, water heaters, air conditioners, and heat pumps
• Electrical junction and circuit breaker boxes and required utility connections
• Foundation elements
• Stairways, staircases, elevators, and dumbwaiters
• Unpainted drywall walls and ceilings, including nonflammable insulation
• Cleanup
The following items are covered under contents coverage:
• Clothes washers and dryers
• Food freezers and the food in them

MYTH: The NFIP does not cover flooding resulting from hurricanes or the overflow of rivers or tidal waters.FACT: The NFIP defines covered flooding as a general and temporary condition during which the surface of normally dry land is partially or completely inundated. Two properties in the area or two or more acres must be affected. Flooding can be caused by:
• Overflow of inland or tidal waters, or
• Unusual and rapid accumulation or runoff of surface waters from any source, such as heavy rainfall, or
• Mudflow, i.e., a river of liquid and flowing mud on the surfaces of normally dry land areas

MYTH: Only residents of high-flood risk areas need to insure their property.FACT: All areas are susceptible to flooding, although to varying degrees. If you live in a low to- moderate flood risk area, it is advisable to have flood insurance. Nearly 25 percent of the NFIP’s claims come from outside high-flood risk areas.